"In the wake of the example of UC Berkeley economist Hal Varian, who helped Google perfect the auction process behind its multibillion-dollar search advertising revenue stream, big Internet companies are competing to woo economists away from universities or work with them on specific projects. Yahoo has been among the most aggressive, but eBay, Amazon.com, Facebook and other companies also are recruiting practitioners of what used to be called "the dismal science." Illustrating how crucial companies think those skills are, Microsoft CEO Steve Ballmer personally recruited economist Susan Athey from Harvard.
"Other companies have recognized that economists really have a lot to contribute," said Varian, who joined Mountain View-based Google full time in 2007 after having worked as a consultant for the search giant since 2002. Google has 10 economists, statisticians and other quantitative analysts on Varian's staff, and is looking to hire more.
"Internet companies see the economists as critical in their efforts to fine-tune advertising networks that serve millions of online ad impressions a day, and to better understand e-commerce platforms with tens of millions of buyers and sellers. Economists can also help determine whether new businesses or approaches will be effective."
...
"Yahoo chief economist Preston McAfee, who joined the Sunnyvale company from the California Institute of Technology in 2007, has long believed that economics could be a practical discipline, like engineering. McAfee now heads a team of seven Ph.D. economists and five game-theory/algorithmic scientists who work with software engineers to create products that aren't just smart but are also savvy.
"Engineers are pretty nice people, and they assume the rest of the world is pretty nice like them," said McAfee. "But that's not the way most people are. And if you build (software) assuming that's the way people are, it will get heavily spammed. So one of the roles that economics plays at Yahoo and other tech companies is to be just a little more suspicious about human nature."
...

"One of Varian's first jobs was to polish Google's nascent search advertising, in which advertisers bid for keywords that bring up their text ad when someone Googles that term. Search advertising has since transformed Google into a corporate colossus.
"Eric Schmidt said, 'Take a look at this ad auction,' " said Varian, "and I sat down to try to model the behavior of that auction, and wrote the first model ever of what I call a position auction.
"At that time, I talked to my fellow economists and said, 'You know, there really are some interesting things going on here,' and they would say, 'Is that economics?' And now, of course, years later, people say, 'Wow, how did you know that was going to be so big?' And the answer is, I didn't. I just thought it was really interesting and it turned out to be big."

"But the real winners will be the people who rely on these life-saving gifts, organs and tissues that will give thousands of people a second chance at life," Denton says.

"Every day, 19 people die while waiting for an organ transplant and another 138 people are added to the national waiting list. The University of Michigan Health System began a new effort this year, dubbed Wolverines For Life, to encourage organ, tissue, eye, blood, and bone marrow donation by U-M employees, patients, students, alumni, fans and everyone in the state of Michigan.

"To kick off this effort, U-M Football Coach Rich Rodriguez, along with Health System leaders, encouraged people to join in the annual Wolverine-Buckeye challenge. The challenge allowed people to sign up as organ donors upon their death and have their pledge tallied for their favorite school.

The following job market ad at Econ-jobs.com for a new economist at Amazon caught my eye, both for what it suggests about the kind of internal research Amazon hopes to do, and about what kind of economists they hope to hire:

"Economists at Amazon will be expected to work directly with chief economist Patrick Bajari and senior management on key business problems faced in retail, international retail, cloud computing, third party merchants, search, Kindle and operations.Amazon economists will apply the frontier of economic thinking to market design, pricing, forecasting, online advertising and other areas. You apply econometric modeling, working with our world class data systems, and economic theory to business problems. In addition, economists at Amazon will be expected to maintain an independent and active research agenda, publishing in leading academic journals."

"Basic Qualifications: PhD in Economics or anticipating completion of a PhD in Economics by Aug 2011
"Preferred Qualifications:
Strong background in econometrics, industrial organization, economic theory and quantitative methods
Ability to work in a fast paced business environment Strong research track record
Effective verbal and written communication skills

Most companies don't hire researchers who publish. Companies that do often are aiming at people who already have academic jobs, and want to keep the possibility open of returning to academia, and in that case the ability to publish (permission to use company data plus time to write papers) is a perk aimed at attracting the right kind of people.

I don't know how much success Amazon has had in the past at hiring economists with active research agendas, but now that they've hired Bajari they clearly have some prospects, particularly if they will be open to having their economists publish about some of the very interesting design problems that Amazon faces, as a marketplace for goods, for merchants, and for computing services.

Amazon likely has particularly good data--they seem to be able to keep track of the same commodity sold by their various different vendors. And each of their three big marketplaces offers the possibility for conducting very interesting experiments.

So...maybe Amazon will start being a source of new research in market design. We'll have to wait and see.

And incidentally, does anyone remember when only banks had a post called Chief Economist? That title is now a tech title too (e.g. Hal Varian at Google and Susan Athey at Microsoft.) Together with the employment of microeconomists under other job titles (e.g. Preston McAfee, David Reiley and Michael Schwarz at Yahoo!, and Paul Milgrom in various entrepreneurial ventures over the years), it's a sign that market design and experiments and related ideas are coming of age.

Sunday, November 28, 2010

"India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor.
...
"Initially the work of nonprofit groups, the tiny loans to the poor known as microcredit once seemed a promising path out of poverty for millions. In recent years, foundations, venture capitalists and the World Bank have used India as a petri dish for similar for-profit “social enterprises” that seek to make money while filling a social need. Like-minded industries have sprung up in Africa, Latin America and other parts of Asia.

"But microfinance in pursuit of profits has led some microcredit companies around the world to extend loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. Some companies have more than doubled their revenues annually.

"Now some Indian officials fear that microfinance could become India’s version of the United States’ subprime mortgage debacle, in which the seemingly noble idea of extending home ownership to low-income households threatened to collapse the global banking system because of a reckless, grow-at-any-cost strategy. "

Saturday, November 27, 2010

That's the subject of this Treasury Dept. report, published in 2000: Commerce in Firearms in the United States
"Each year, about 4-1/2 million new firearms, including approximately 2 million handguns, are sold in the United States. An estimated 2 million secondhand firearms are sold each year as well. A critical part of the mission of the Bureau of Alcohol, Tobacco and Firearms (ATF) is to prevent diversion of these firearms from the legal to the illegal market, and to keep them out of the hands of criminals, unauthorized juveniles and other prohibited persons under the Gun Control Act (GCA). This report presents data on the firearms market and describes ATF’s regulatory enforcement programs to prevent firearms trafficking. Criminal investigation, which is also central to ATF’s anti-trafficking work, is discussed in separate reports."

Friday, November 26, 2010

"During Ireland's boom years, thousands of people bought horses as a status symbol. But with the economy in crisis, many owners can't afford to keep them. Some 20,000 abandoned horses are roaming Ireland and could face starvation this winter.
...
"A horse slaughterhouse in Kilkenny processed more than 3,000 horses last year, five times more than in 2005. Most of the horse steaks are exported to France.

"But only well-nourished horses whose health has been comprehensively logged are allowed to be slaughtered. One wrong drug and the meat is labelled as unsellable. Contrary to EU rules, most Irish horses don't carry implanted microchips containing their most important data. So their remains can't even be processed into dog food. The absence of microchips also makes it impossible to track where an abandoned horse came from. That makes it tempting for troubled owners just to dump their horses by the roadside because it would cost €300 to have the animal put down and disposed of by a vet."

Thursday, November 25, 2010

The UNOS National Kidney Paired Donation Pilot System is cautiously expanding its scope to include non-directed donor chains
"St. Louis: The OPTN/UNOS Board of Directors, meeting Nov. 8-9, approved a proposal to broaden potential participation in the recently established national pilot program for kidney paired donation (KPD) transplantation.

"The pilot program was initially approved for operation to match only two to three pairs of transplant candidates and their intended donors. All of these intended donors had meant to donate to a specific recipient before they were found to be medically incompatible with that person. (For additional resource information about the paired donation process, visit the OPTN website: http://optn.transplant.hrsa.gov/resources/KPDPP.asp.

"Once the newly approved protocol is implemented, pairs can be matched with a "non-directed donor" - a person who chooses to be a living donor but does not come forward to help a specific patient. By including one non-directed donor and a series of other donor/candidate pairs, a chain of transplants can be performed that ends with the transplantation of a candidate who had been awaiting a deceased donor transplant. This is known as "donor chain."

"The pilot program is intended to determine whether having a national base for paired donation can result in more transplants," said OPTN/UNOS President Charles Alexander, RN, M.S.N., M.B.A. The transplant community asked us to take some extra time to study whether and how to add non-directed donors and chains; A number of transplant centers and paired donation organizations have been performing chains for years with good results, and the consensus is that this option should be part of the national pilot."

"Sanford Transplant Services, part of Sanford Health of Fargo, N.D., has been in place since 1989 and has completed more than 580 transplants. Dr. Bhargav Mistry has been an instrumental leader in the program and has completed more than 400 of those transplants. Hospital leaders and others say Mistry's commitment to the excellence and genuine care for his patients has built the program into what it is today - a nationally recognized transplant program offering the latest in surgery and technology.

"An example of that innovation occurred in July 2010, when an anonymous kidney donor set off a sequence of 10 surgeries involving 10 patients and resulting in five people receiving kidney transplants.

"The rare chain of surgeries - the first of its kind in North Dakota - was made possible using a unique paired exchange program involving multiple transplant centers based in Minneapolis. Under a transplant chain, or exchange, a potential recipient and her willing, but incompatible, donor family member, friend or other donor are listed in a waiting "pool," along with other mismatched pairs.

"Then, when any potential donor on the list is determined to be compatible for any potential recipient also on the list, the donor gives their organ anonymously if a donation match will also be made for his partner.
...
"In this case, a Minneapolis non-directed donor, or an anonymous donor who meets strict criteria to donate a kidney, was a match for a potential recipient in Fargo in the paired exchange pool.

"Therefore, the donor's kidney was recovered and flown to Fargo. Two surgeries later, a kidney from Fargo was driven to Minneapolis, extending the chain with four more transplants at Abbott Northwestern Hospital and University of Minnesota Medical Center, Fairview. In total, 10 people produced five successful kidney transplants.
...
"Mistry seems incredibly compassionate about his chosen career; in fact, he has been personally affected by the need for donation. His daughter, Karishma Mistry, was born without a gall bladder, and doctors told the Mistrys years ago that she would eventually need a new liver.

"I decided to go into transplantation a few months before she was born," Mistry said. "I didn't know we would be in this kind of situation. I think it was just fate."

Large non-simultaneous chain in San Antonio at Methodist Specialty and Transplant Hospital, includes 16 transplants: here's a video report from CNN.

And here's a paper on the virtual matching process...

Virtual Crossmatch Approach to Maximize Matching in Paired Kidney Donation.
Am J Transplant. 2010 Nov 10;
Authors: Ferrari P, Fidler S, Wright J, Woodroffe C, Slater P, Van Althuis-Jones A, Holdsworth R, Christiansen FT
Abstract: "We developed and tested a new computer program to match maximal sets of incompatible live donor/recipient pairs from a national paired kidney donation (PKD) registry. Data of 32 incompatible pairs included ABO and 4 digit-high-resolution donor and recipient HLA antigens and recipient’s HLA antibodies. Three test runs were compared, in which donors were excluded from matching to recipients with either donor-specific antibodies (DSA) >8000MFI (mean fluorescent intensity) at low-resolution (Run 1) or >8000MFI at high-resolution (Run 2) or >2000MFI and high-resolution (Run 3). Run 1 identified 22 703 possible combinations, with 20 pairs in the top ranked, Run 2 identified 24 113 combinations, with 19 pairs in the top ranked and Run 3 identified 8843 combinations, with 17 pairs in the top ranked. Review of DSA in Run 1 revealed that six recipients had DSA 2000-8000MFI causing a possible positive crossmatch resulting in breakdown of two 3-way and three 2-way chains. In Run 2, four recipients had DSA 2000-8000MFI, also potentially causing breakdown of three 2-way chains. The more prudent approach of excluding from matching recipients with DSA with >2000MFI reduces the probability of matched pairs having a positive crossmatch without significantly decreasing the number of possible transplants."

Wednesday, November 24, 2010

It begins:
"In October 1972, after a month of deliberation, Congress launched the nation’s most ambitious experiment in universal health care: a change to the Social Security Act that granted comprehensive coverage under Medicare to virtually anyone diagnosed with kidney failure, regardless of age or income..."

But most of the story focuses on the dire situation of those in dialysis."Dialysis entered the American consciousness in the early 1960s as the country’s signature example of medical rationing. In those days, kidney disease killed about 100,000 people a year. Chronic dialysis was possible, thanks to two inventions: the artificial-kidney machine developed by the Dutch doctor Willem Kolff during World War II and a vascular-access device designed by Belding Scribner, a pioneering Seattle physician who opened the first outpatient dialysis center in the United States. But treatments were expensive, and most private insurers would not pay for them. At Scribner’s medical center, the Life or Death Committee parceled out the few slots, weighing not only the health of patients and their income, but also their perceived social worth.

"News reports about the committee’s work sparked one of the earliest national debates over the right to care and put pressure on the government to step in. A turning point came when Shep Glazer, vice president of the largest patient group, made an emotional appeal to the House Ways and Means Committee, as he underwent dialysis on the hearing-room floor. “If your kidneys failed tomorrow, wouldn’t you want the opportunity to live?” asked the 43-year-old father of two. “Wouldn’t you want to see your children grow up?”

"The measure establishing taxpayer funding for treatment of end-stage renal disease, signed into law by President Nixon, was expansive, and its lopsided, bipartisan approval reflected the times. Many lawmakers—even conservatives—thought the United States would adopt a European-style national health-care system. Also, the program that took effect in July 1973 was expected to have about 35,000 patients and cost about $1 billion in its 10th year.

"Those estimates came to seem almost laughable. The number of dialysis patients surpassed 35,000 by 1977 and has gone up from there. The growth reflected not only lower-than-expected transplant rates and the spread of diabetes, but also positive trends, like better cardiac care. With Americans living long enough for their kidneys to fail and no disqualifying conditions for the program, even the oldest and sickest patients increasingly were prescribed dialysis. Upwards of 100,000 now start treatment each year. “It’s been a perfect example of that line, ‘Build it and they will come,’” said Dr. Jay Wish, director of dialysis services for University Hospitals Case Medical Center in Cleveland.

"Because the kidney program absorbed that unforeseen wave—and thus, prolonged so many lives—some call it one of the great success stories of modern medicine. Still, the annual bill for the program quickly outpaced early projections, surging past $1 billion within six years. Per-patient expenditures were expected to drop as technology advanced. Instead they have risen steadily, as drug and hospitalization costs grew for the program’s increasingly frail clientele."
...
"Problems like those that regulators found in McMurry’s clinic are partly rooted in economics. The government’s payment policies for dialysis have created financial incentives that, in some ways, have worked against better patient care, while enabling for-profit corporations to dominate the business.

When the end-stage-renal-disease program began, hospitals provided most of the care on a nonprofit basis. But spurred by the guarantee of Medicare money, the marketplace met the growing demand for services through the expansion of for-profit companies. Today, more than 80 percent of the nation’s 5,000 clinics are for-profit. Almost two-thirds of all clinics are operated by two chains: Colorado-based DaVita and Fresenius, a subsidiary of a German corporation that is the leading maker of dialysis machines and supplies.

From the start, the government’s payment rules rewarded efficiency. Medicare set a rate for dialysis treatments, originally $138 per session, and covered a maximum of three treatments a week for most patients. Providers could keep whatever they didn’t spend on care. There were no penalties for poor results and no bonuses for good ones. Unlike other Medicare rates, the payment wasn’t adjusted upward for inflation.

Lawmakers cut the base rate to about $123 per treatment in 1983, after the program’s cost came in higher than expected and audits showed providers averaging profits of more than 20 percent. Dialysis companies responded like any other business facing a drop in prices, said Philip J. Held, a nationally recognized researcher on kidney disease and an economist by training. They chopped expenses by shortening treatments, thinning staff, and assigning tasks once done by nurses to unlicensed technicians. Some reused dialyzers, the filters that clean the patient’s blood. “It changed the nature of the service,” Held said of the rate cut. “You get what you pay for. The price was lower, but the product was dramatically different.”

The government created another perverse incentive by allowing clinics to bill Medicare separately for certain medications, reimbursing them at a markup over what they paid drug makers. Dialysis companies embraced the opportunity: doses of Epogen, prescribed to treat anemia, and similar medications tripled between 1989 and 2005, becoming Medicare’s single largest pharmaceutical expense. “Their core business became giving patients injectable drugs,” said Richard A. Hirth, a professor of health management and policy at the University of Michigan School of Public Health. “Dialysis was just the loss leader that got [patients] in the door.”

He notes:
"University College London writes in their JOE ad that: "We will pay particular attention to the applications of candidates who have signalled their interest in UCL through the AEA signalling system."

You should read the whole thing, but here's a part that caught my eye as focusing particularly on an entrepreneurial act of market design.

"Entrepreneurs have played a key role in every stage of New York’s development. During the early nineteenth century, when waterways were the lifelines of commerce, New York owed its expanding sea trade partly to natural advantages: a safe, centrally located harbor and a deep river that cut far into the American hinterland. But those advantages became important because of the vision and energy of entrepreneurs like Jeremiah Thompson, the gambling Quaker. Thompson immigrated to New York at 17 to work in the American branch of his family’s wool business. By the 1820s, he had established himself as America’s largest importer of English clothing, its largest exporter of raw cotton, and its third-largest issuer of bills of exchange.

"As a global trader, Thompson was acutely aware of the shortcomings of the transatlantic ships of the time, which would stay in port until their hulls were filled with goods. (Imagine showing up at LaGuardia and having to sit around until the airline sold enough tickets to fill the entire flight to Frankfurt.) Thompson saw an opening and created the Black Ball packet line, whose ships set sail on a scheduled day every month, no matter how light their cargoes were. His innovation was a gamble, since sometimes his ships sailed with relatively empty hulls, which meant less income from the merchants who bought the space. But a virtuous circle developed: fixed schedules attracted more cargo, and more cargo made ships sailing on fixed schedules more profitable. Once Thompson was turning a profit, other packet lines, like the Yellow Ball and Swallowtail lines, entered the market. An 1827 letter to the New England Palladium described the significance of Thompson’s invention: “I consider Commerce by lines of ships, on fixed days, an invention of the age nearly as important as Steam Navigation and in its results as beneficial to New York, which has chiefly adopted it, as the Grand [Erie] Canal.”

"Thanks to such innovation, the city grew great during the first half of the nineteenth century, its population rising from 33,000 in 1790 to 814,000 on the eve of the Civil War. In 1821, New York’s exports, measured in dollars, were less than 10 percent higher than Boston’s. By 1860, New York was exporting over 700 percent more than the city on the Charles."

Sunday, November 21, 2010

When we speak of strategy-proofness in the context of school choice, we are most often speaking about whether it is safe for parents to reveal their true preferences when asked to submit a rank ordering of possible school assignments. Of course, parents have other private information as well, and they may have incentives to misprepresent that also.

I'm reminded of this by the fact that the San Francisco Unified School District has recently sent a letter to the address of record to each student regarding an Amnesty Period for Residency Fraud.(It includes the line "This letter is directed to families that have committed residency fraud. Parents/Guardians who have never submitted false residency information to the District may disregard this letter.")

Saturday, November 20, 2010

Lately there have been a number of news stories about research misconduct of the "conventional" sort, involving scientists falsifying the scientific record by fabricating or misrepresenting data. When federal granting agencies find that someone has committed this kind of fraud they have procedures for denying them future grants, etc.

Here's a story about a kind of egregious scientific misconduct that is not covered by such procedures, although the criminal law addresses a small part of it. The story is about a scientist who sabotoged another scientist's experiments: Research integrity: Sabotage!

"Bhrigu, over the course of several months at Michigan, had meticulously and systematically sabotaged the work of Heather Ames, a graduate student in his lab, by tampering with her experiments and poisoning her cell-culture media. Captured on hidden camera, Bhrigu confessed to university police in April and pleaded guilty to malicious destruction of personal property, a misdemeanour that apparently usually involves cars: in the spaces for make and model on the police report, the arresting officer wrote "lab research" and "cells".
...
"Bhrigu's actions are surprising, but probably not unique. There are few firm numbers showing the prevalence of research sabotage, but conversations with graduate students, postdocs and research-misconduct experts suggest that such misdeeds occur elsewhere, and that most go unreported or unpoliced. In this case, the episode set back research, wasted potentially tens of thousands of dollars and terrorized a young student. More broadly, acts such as Bhrigu's — along with more subtle actions to hold back or derail colleagues' work — have a toxic effect on science and scientists. They are an affront to the implicit trust between scientists that is necessary for research endeavours to exist and thrive.

"Despite all this, there is little to prevent perpetrators re-entering science. In the United States, federal bodies that provide research funding have limited ability and inclination to take action in sabotage cases because they aren't interpreted as fitting the federal definition of research misconduct, which is limited to plagiarism, fabrication and falsification of research data. In Bhrigu's case, administrators at the University of Michigan worked with police to investigate, thanks in part to the persistence of Ames and her supervisor, Theo Ross.
...
"At Washtenaw County Courthouse in July, having reviewed the case files, Pollard Hines delivered Bhrigu's sentence. She ordered him to pay around US$8,800 for reagents and experimental materials, plus $600 in court fees and fines — and to serve six months' probation, perform 40 hours of community service and undergo a psychiatric evaluation.

"But the threat of a worse sentence hung over Bhrigu's head. At the request of the prosecutor, Ross had prepared a more detailed list of damages, including Bhrigu's entire salary, half of Ames's, six months' salary for a technician to help Ames get back up to speed, and a quarter of the lab's reagents. The court arrived at a possible figure of $72,000, with the final amount to be decided upon at a restitution hearing in September.

"Before that hearing could take place, however, Bhrigu and his wife left the country for India...
"Now that Bhrigu is in India, there is little to prevent him from getting back into science. And even if he were in the United States, there wouldn't be much to stop him. The National Institutes of Health in Bethesda, Maryland, through its Office of Research Integrity, will sometimes bar an individual from receiving federal research funds for a time if they are found guilty of misconduct. But Bhigru probably won't face that prospect because his actions don't fit the federal definition of misconduct, a situation Ross finds strange. "All scientists will tell you that it's scientific misconduct because it's tampering with data," she says."

Friday, November 19, 2010

“For a lot of college students, it’s just a little extra spending money,” Mr. Canze said when I asked about the plasma trade. “I probably know nine to a dozen people who will go regularly. They screen you, hook you up, pump you, and get you on your way.” Each visit to the local BioLife Plasma Services facility takes about an hour, during which you can read, listen to music, or get on Facebook through the company’s Wifi network. The facility even offers day care.

“Donating” is a euphemism the company uses. The frequently-asked-questions section of the company’s Web site includes the question: “Why do plasma donors receive money for donating?” The answer: “Plasma donors spend up to two hours, as often as twice a week, in our centers to help save someone’s life or improve the quality of it. We merely offer compensation to our donors for their commitment to the program. For more compensation information, contact your local center directly.”

You make $20 per BioLife visit, Mr. Canze told me. You can go as often as twice a week, and if you go at least once a week for a month, you get a $20 bonus. The math is easy enough—you can make $180 a month. That’s real money, especially for college students, especially in Michigan.

Abstract: Hematopoietic stem cell transplantation (HSCT) is a curative procedure for life threatening hematological diseases. Donation of hematopoietic stem cells (HSC) from an unrelated donor, frequently residing in another country, may be the only option for 70% of those in need of unrelated HSCT. To maximize the opportunity to find the best available donor, individual donor registries collaborate internationally. To provide homogeneity of practice among registries, the World Marrow Donor Association (WMDA) sets standards against which registries are accredited, and provides guidance and regulations concerning unrelated donor safety and care. A basic tenet of the donor registries is that unrelated HSC donation is an altruistic act; non-payment of donors is entrenched in the WMDA standards and in international practice. In the United States, the prohibition against remuneration of donors has recently been challenged. In this document we describe the reasons that the WMDA continues to believe that HSC donors should not be paid due to ethical concerns raised by remuneration, potential to damage the public will to act altruistically, the potential for coercion and exploitation of donors, increased risk to patients, harm to local transplantation programs and international stem cell exchange, and the possibility of benefiting some patients while disadvantaging others."

(About this latter paper he writes "Ted Bergstrom and I will be presenting this work at a session on The Economics of Blood, Stem Cell and Organ Donation at this year's winter meeting of the American Economic Association in Denver. If you are interested in attending, the session will take place Jan 08, 2011 10:15 am at the Sheraton, Director's Row H.

Wednesday, November 17, 2010

Illegal, black markets for kidneys are often cited both by opponents and proponents of legal markets: opponents look at the abuses in illegal markets and fear that legal markets would spread them, and proponents look at illegal markets and hope that legal markets would curb them.

Seven Charged in Kosovo Organ-Trafficking Ring
"At least seven people have been charged with participating in an international organ-trafficking network based in Kosovo that sold kidneys and other organs from impoverished victims for up to $200,000 to patients from as far away as Israel and Canada, police and senior European Union officials said Monday.

"According to the indictment, the traffickers lured people from slums in Istanbul, Moscow, Moldova and Kazakhstan with promises of up to $20,000 for their organs. Law enforcement officials say many never received a cent. The operations were performed at a private clinic in a run-down neighborhood on the outskirts of Pristina, the Kosovar capital.

"While the ring was first discovered two years ago, the global scale of the network and its victims is only now becoming clear.

"Officials said the ringleader was a highly regarded surgeon and professor at Pristina University Hospital, Dr. Lutfi Dervishi. The clinic was run by his son, Arban. Also charged was Ilir Rrecaj, a senior official in Kosovo’s Health Ministry when the ring was broken. They and two others are accused of crimes including trafficking in humans and body parts, unlawful medical activity, participating in organized crime, and abuse of office. All were released on bail.
...
"The trafficking network’s tentacles reached far. Warrants were issued for a Turkish doctor and an Israeli financier, and two other doctors, an Israeli and a Turk, were named as co-conspirators.

"The police said the ring had its roots at a medical conference in 2006 in Istanbul, where Dr. Dervishi met the Turkish doctor being sought, Yusuf Sonmez. Law enforcement officials describe Dr. Sonmez as a notorious international organ trafficker.

"The Medicus clinic had been founded by a European philanthropist who aided ethnic Albanian doctors during the war in Kosovo in 1999. Dr. Dervishi, police officials said, secretly transformed it into a hub for illegal organ transplants, which were performed by Dr. Sonmez.

"The indictment was first reported by The Associated Press. In it, a European Union prosecutor, Jonathan Ratel, said that in 2008, 20 foreign nationals living in “extreme poverty or acute financial distress” were “recruited with the false promises of payments.”

"The police said they broke the ring in November of that year, when a young Turkish man, Yilman Altun, was found at the Pristina airport, weak and frail. Mr. Altun told the police that his kidney had been stolen. When the police raided the Medicus clinic, they discovered an elderly Israeli man who had received Mr. Altun’s kidney.

"European Union officials said that the indictment in the case had been filed in district court in Kosovo and that a preliminary hearing was expected by the end of the year. If a judge confirms the charges, a trial will follow.
...
"Western law enforcement officials said they suspected the ring might be part of a larger criminal network whose nexus was in Israel. In September, five doctors from South Africa were charged with participating in an international kidney-trading syndicate in which dozens of poor Brazilians and Romanians were paid for kidneys for wealthy Israelis. Analysts said the organ-trafficking case was part of a disturbing global trend in which unscrupulous traffickers take advantage of the growing waiting lists of desperate patients and the vulnerability of poor people further buffeted by the international financial crisis."

Aside from some articles that Steve Leider pointed out to me, which are now several years old, I don't find much online about the market for mothers' milk. But in 2007, it apparently looked like the market for wet nurses might be making a comeback.

Outsourcing Breast Milk:
"...wet-nursing (hiring a woman to breast-feed your baby), which most of the Western world abandoned in the 19th century, is making a minor comeback among young moms. So is cross-nursing, in which mothers breast-feed one another's babies. Both reflect several cultural trends: more U.S. babies--upwards of 70%--are breast-fed than at any time in at least 50 years, more women work outside the home, and more young women undergo breast surgery. Advocates argue that milk sharing lets women be good moms while fulfilling other goals. Says Natalia Chang, 29, who has cross-nursed with her San Jose, Calif., neighbor: Breast milk is "a communal commodity around here."

"Not everyone is comfortable with this freewheeling baby feeding. Milk banks, which sell bottled breast milk, already make some people squirm; the idea of physically breast-feeding a child not your own evokes even deeper taboos. Rhonda Shaw, a sociologist who studies shared nursing in New Zealand, where the trend is also up, says many confuse "adult meanings of eroticism with breast feeding ... Sometimes people associate a woman breast-feeding another woman's baby with pedophilia." Even the pro-nursing group La Leche League has concerns about milk sharing because, in addition to helpful immunities and antibodies, viruses can be passed through breast milk."
...
"Even if you accept that cross-nursing is for the collective good, wet nurses magnify the discomfort that many people already feel about the wealthy employing less advantaged women to do domestic duties. That's why the few women who hire wet nurses--mostly because they have adopted, have had breast implants or reductions or have high-powered careers--keep it a secret, for fear of being judged bad mothers. Still, Robert Feinstock, who owns CertifiedHouseholdStaffing.com a Los Angeles--based agency that supplies wet nurses nationwide, says demand has steadily risen in the past four years, even though the standard fee of $1,000 a week is more than the average nanny gets.
"Brenda (whose last name is withheld to protect her clients' privacy), 42, has wet-nursed 10 babies in the past seven years partly to help send her own two kids to college. She has mulled over the social implications of her work--because she's black and eight of the families she has worked for are white. "A friend asked me, Don't you feel like you're the mammy?" she recalls. But she finds her job fulfilling, and sometimes amusing. "If you're someplace with the family and the baby starts to pull at your blouse or put his hand in your bra, that can be embarrassing," she says, laughing."

A Duke law professor who is also on his shul's hiring committee thinks that the Conservative rabbinate's efforts to shape the career paths of rabbis violates the antitrust laws. (I'm no lawyer, but religious institutions probably have some constitutional protection...) My impression is that quite a few religious denominations similarly try to shape the labor market for clergy.

"As a member of my synagogue’s rabbi search committee, I was deeply troubled to learn of the rules imposed by the Rabbinical Assembly, the Conservative movement’s governing rabbinical body, on rabbinic searches. The RA requires synagogues to enroll exclusively in its search process, filters the selection of candidates the congregations may interview, and prohibits candidates and congregations from finding each other directly. Any Conservative rabbi who seeks a pulpit outside the RA’s centralized process, and any congregation that interviews candidates from other movements, will be penalized.
...
"RA placement rules, for example, prohibit young rabbis from assuming pulpits at anything but the smallest congregations. The placement rules also prohibit congregations from extending long-term contracts to rabbis hired as “transitional” rabbis, even when those congregations and rabbis would prefer to stay together. By restricting Conservative congregations from interviewing rabbis from other movements, the rules also are designed to ward off competitive threats from independent seminaries such as Boston’s Hebrew College and denominational seminaries such as the Reconstructionist Rabbinical College. These are rules aimed to achieve full employment for RA members rather than to advance Conservative Judaism.

"Although our search did not immerse us in the rules of other American denominations, it appears that the other movements employ similarly restrictive — and similarly illegal — placement systems. The Reform movement’s Central Conference of American Rabbis, which mostly draws from Hebrew Union College campuses, adheres to an assignment system whereby years of pulpit experience strictly correlate with size of synagogue and salary."

Thursday, November 11, 2010

Last week, a survey of the National Association for College Admission Counseling found that colleges and universities are increasing the number of students admitted through early admissions programs. This development is highly disturbing, especially in light of a new study, published in Teachers College Record, highlighting the inequity of the practice, which is employed at many institutions.

According to the NACAC report, State of College Admission 2010, 65 percent of colleges and universities reported increases in the number of students admitted through “early decision,” a practice in which applicants apply early to one institution, and, if admitted, must commit to enrolling. The report also found that 73 percent of institutions reported increases in the number of students admitted through “early action” policies, under which students are admitted early but do not commit to attending.

Researchers, including Christopher Avery, Andrew Fairbanks, and Richard Zeckhauser, have long found that these practices tends to benefit white, wealthy and educated applicants, who receive an admissions boost equivalent to 100 SAT points. Critics have pointed out that early decision programs are particularly unfair to low-income applicants because the binding commitment to attend a particular college eliminates the ability to bargain between colleges for the most advantageous financial aid packages. The unfairness of these programs prompted Harvard, Princeton, and the University of Virginia to abandon the practice. But most other colleges and universities did not follow suit, and now polling suggests many institutions are actually increasing their reliance on early admissions.

Some institutions, such as Yale and Stanford, employ early action, rather than early decision, thus permitting low-income students to compare financial aid packages. But a new study by Julie J. Park of Miami University and M Kevin Eagan of the UCLA Higher Education Research Institute, finds that both early action and early decision programs raise troubling questions about equity given the makeup of the student population who have the cultural capital to know the advantages of applying early.

The study found not only that white and wealthier students were more likely to apply early; in addition, other factors mattered a great deal. Receiving private college counseling was the strongest predictor of enrolling through early admissions. In addition, attending a high school where each college-counselor has a manageable number of students increased the chances of students taking advantage of early admissions.

Importantly, while most previous research on early admissions has focused on a small number of elite institutions, Park and Eagan’s study, “Who Goes Early? A Multi-Level Analysis of Enrolling via Early Action and Early Decision Admissions,” employ a much larger national data set involving 88,086 students who came from 4,491 high schools and applied to 290 colleges and universities.

The authors point out that the policy of early admissions – like the policy of legacy preferences – defies the commitment of colleges to make “need blind” admissions. They write: “early decision in particular works as a sort of class-based affirmative action that gives wealthier applicants a ‘plus’ factor: a higher likelihood of being admitted than if they applied under the regular decision deadline.”

Wednesday, November 10, 2010

One lesson we've learned from working on school choice in NYC and Boston is that the educational bureaucracies have enough turnover that it is hard to keep in close contact. In each place, the people with whom we worked most closely have moved on to other jobs. Now in NYC the last of the higher level leaders who were involved in revamping the high school choice process are leaving as well:Elizabeth Sciabarra is leaving as head of student enrollment, and Joel Klein is leaving as chancellor (Publishing exec named new NYC schools chancellor)

Tuesday, November 9, 2010

Noam Nisan at AGT/E reports on New Papers on Auctions by computer scientists, including this one that I find interesting for several reasons: it is about market design for markets in which privacy is sold.

We initiate the study of markets for private data, through the lens of differential privacy. Although the purchase and sale of private data has already begun on a large scale, a theory of privacy as a commodity is missing. In this paper, we propose to build such a theory. Specifically, we consider a setting in which a data analyst wishes to buy information from a population from which he can estimate some statistic. The analyst wishes to obtain an accurate estimate cheaply. On the other hand, the owners of the private data experience some cost for their loss of privacy, and must be compensated for this loss. Agents are selfish, and wish to maximize their profit, so our goal is to design truthful mechanisms. Our main result is that such auctions can naturally be viewed and optimally solved as variants of multi-unit procurement auctions. Based on this result, we derive auctions for two natural settings which are optimal up to small constant factors:
1. In the setting in which the data analyst has a fixed accuracy goal, we show that an application of the classic Vickrey auction achieves the analyst’s accuracy goal while minimizing his total payment.
2. In the setting in which the data analyst has a fixed budget, we give a mechanism which maximizes the accuracy of the resulting estimate while guaranteeing that the resulting sum payments do not exceed the analysts budget.
In both cases, our comparison class is the set of envy-free mechanisms, which correspond to the natural class of fixed-price mechanisms in our setting.
In both of these results, we ignore the privacy cost due to possible correlations between an individuals private data and his valuation for privacy itself. We then show that generically, no individually rational mechanism can compensate individuals for the privacy loss incurred due to their reported valuations for privacy.

The Atlantic runs a profile of Dr. John Ioannidis, who studies bad science. He focuses on medicine, where the incentives are perhaps highest (and in which the costs of bad science might be greatest). But the issues he discusses concern all scientists: Lies, Damned Lies, and Medical Science

"He chose to publish one paper, fittingly, in the online journal PLoS Medicine, which is committed to running any methodologically sound article without regard to how “interesting” the results may be. In the paper, Ioannidis laid out a detailed mathematical proof that, assuming modest levels of researcher bias, typically imperfect research techniques, and the well-known tendency to focus on exciting rather than highly plausible theories, researchers will come up with wrong findings most of the time. Simply put, if you’re attracted to ideas that have a good chance of being wrong, and if you’re motivated to prove them right, and if you have a little wiggle room in how you assemble the evidence, you’ll probably succeed in proving wrong theories right. His model predicted, in different fields of medical research, rates of wrongness roughly corresponding to the observed rates at which findings were later convincingly refuted: 80 percent of non-randomized studies (by far the most common type) turn out to be wrong, as do 25 percent of supposedly gold-standard randomized trials, and as much as 10 percent of the platinum-standard large randomized trials. The article spelled out his belief that researchers were frequently manipulating data analyses, chasing career-advancing findings rather than good science, and even using the peer-review process—in which journals ask researchers to help decide which studies to publish—to suppress opposing views. “You can question some of the details of John’s calculations, but it’s hard to argue that the essential ideas aren’t absolutely correct,” says Doug Altman, an Oxford University researcher who directs the Centre for Statistics in Medicine.

"Still, Ioannidis anticipated that the community might shrug off his findings: sure, a lot of dubious research makes it into journals, but we researchers and physicians know to ignore it and focus on the good stuff, so what’s the big deal? The other paper headed off that claim. He zoomed in on 49 of the most highly regarded research findings in medicine over the previous 13 years, as judged by the science community’s two standard measures: the papers had appeared in the journals most widely cited in research articles, and the 49 articles themselves were the most widely cited articles in these journals. These were articles that helped lead to the widespread popularity of treatments such as the use of hormone-replacement therapy for menopausal women, vitamin E to reduce the risk of heart disease, coronary stents to ward off heart attacks, and daily low-dose aspirin to control blood pressure and prevent heart attacks and strokes. Ioannidis was putting his contentions to the test not against run-of-the-mill research, or even merely well-accepted research, but against the absolute tip of the research pyramid. Of the 49 articles, 45 claimed to have uncovered effective interventions. Thirty-four of these claims had been retested, and 14 of these, or 41 percent, had been convincingly shown to be wrong or significantly exaggerated. If between a third and a half of the most acclaimed research in medicine was proving untrustworthy, the scope and impact of the problem were undeniable. That article was published in the Journal of the American Medical Association. "

The article ends on a philosophical note:

"We could solve much of the wrongness problem, Ioannidis says, if the world simply stopped expecting scientists to be right. That’s because being wrong in science is fine, and even necessary—as long as scientists recognize that they blew it, report their mistake openly instead of disguising it as a success, and then move on to the next thing, until they come up with the very occasional genuine breakthrough. But as long as careers remain contingent on producing a stream of research that’s dressed up to seem more right than it is, scientists will keep delivering exactly that.

“Science is a noble endeavor, but it’s also a low-yield endeavor,” he says. “I’m not sure that more than a very small percentage of medical research is ever likely to lead to major improvements in clinical outcomes and quality of life. We should be very comfortable with that fact.”

Sunday, November 7, 2010

"The latest in the “X-iness” parade is the title of Charles Seife’s new book, “Proofiness,” defined by Seife as “the art of using bogus mathematical arguments to prove something that you know in your heart is true — even when it’s not.” Seife, an associate professor of journalism at New York University, told me that the title is very much a homage to Colbert. He credits his wife with recognizing during the writing of the book that his topic was “the mathematical analogue of truthiness.” "

Saturday, November 6, 2010

Here's a description of the market for Ph.D. economists, as viewed by the founders of the site walras.com, on VoxEU: A brief guide to hiring PhD economists by Raphael Auer Goran Mišković Jason Wildhagen

Friday, November 5, 2010

Dan gives new meaning to the word "new" as applied to economists...at least in my case. (Although I'm reminded of Frank Hahn's wish to live to a very old age but be remembered as having passed away young and full of promise...)

From the press release:
"Early Decision and Early Action Activity Increases: 65 percent of colleges with ED policies reported increases in the number of students accepted through Early Decision, compared to 43 percent in 2008 and 36 percent in 2007. Nearly three-quarters of colleges reported an increase in Early Action applications and Early Action admits.

"At Colleges with Early Decision (ED) Policies, Gap In Acceptance Rates Between ED and Regular Decision Applicants Increases: For the Fall 2009 admission cycle, colleges with Early Decision policies reported a 15-percentage point gap in acceptance rates between ED applicants and the overall applicant pool (70 percent versus 55 percent), up from an 8 percentage point gap in Fall 2006 (61 percent compared to 53 percent)."

Furthermore (the Chronicle of Higher Ed reports),
"The survey also found an uptick in the proportion of colleges with waiting lists: 39 percent used them in the 2009 cycle. That’s a greater share than in recent years, with the exception of 2007, when waiting-list use reached a high of 41 percent. Forty-seven percent of colleges reported placing more students on a waiting list than they did the year before, and 51 percent said they had accepted more students off of the list.

"This year, for the first time, colleges were asked whether they stratified their waiting lists by various criteria. Fifty-six percent said they had stratified the list based on academic credentials; 45 percent by students’ interest in the college; 33 percent based on students’ commitment to attend if admitted; and 27 percent on ability to pay. On average, colleges accepted 34 percent of students who chose to remain on waiting lists."

Wednesday, November 3, 2010

American students at four year colleges mostly apply to colleges and get admitted as freshmen. A much smaller number of students transfer from one college to another, and graduate from the college that they entered as sophomores or juniors. And of course many students spend a junior year abroad, often visiting a college overseas. But a small number of students spend some time at another American college as visitors. The Crimson describes this at Harvard: Visiting Harvard.

"...Rush and her fellow VUS (pronounced “vuzz” by those in the know) come to Harvard from universities around the world to study for a semester or a year. Though the VUS become involved in most aspects of Harvard life, the existence of this program remains unknown to many at the University and nearly unadvertised outside of Harvard.

"The Visiting Undergraduate Student Program allows undergraduates from any university in the world to apply to attend Harvard for one or two semesters.

"Many of those who participate in this program are international students. Others come from small liberal arts schools in the U.S., and a few come from Harvard’s peer institutions—last year, one visiting student hailed from Princeton and another from Brown.

"The students list a variety of reasons for coming to Harvard, but most center on academics. According to Sarah R. Cole, a lecturer on History and Literature who serves as the advising coordinator for the VUS Program, most of the international students major in economics in their home countries and hope to gain an American perspective on the field. The domestic students, she said, tend to be math or science concentrators who feel they have exhausted the course offerings in their subjects at their colleges.
...
"The application process for visiting students is similar to the regular admissions process, but it differs in several significant ways. First, VUS can enter Harvard in either the fall or spring semesters, so applications are evaluated twice each year.

...
"The number of VUS applications and the admissions rate for the program contrast starkly with the Harvard admissions norm. Whereas 614 students applied for transfer admission and over 30,000 sought regular admission in fall 2010, just 47 applied for the VUS Program. Of those applicants, 32 were admitted, and 30 decided to attend—21 are here for just the fall semester, and 9 will stay for the full year.

"Dean of Admissions and Financial Aid William R. Fitzsimmons ’67 said that the program receives a low number of applicants because the admissions office does not promote it heavily. Though there is a page on the admissions website about the program and the admissions office prints an informational card about it, Fitzsimmons said that his office does not “recruit” VUS applicants as it does for degree candidates.
...
"Another concern for some VUS is the cost of the program. Visiting students are not offered financial aid and thus must pay the full rate of $17,488 per semester to take four courses, in addition to the cost of off-campus housing."

Tuesday, November 2, 2010

An article in the Chronicle of Higher Ed sheds some light on two different ways that colleges try to market themselves to a larger pool of applicants. One is the Common Application (which allows applicants to fill out one application online and then send it to many places, sometimes with supplements required by colleges that don't want too many casual applications). Another is "fast track" applications, which are mailed to high school students with invitations to fill in a shorter application, maybe without any essays at all.The Curious Case of ‘Catnip’ and the Common Application

"But there’s growing concern in high schools about how such applications are coexisting with another fixture of the admissions realm—the Common Application, the free admissions form accepted by 414 colleges.

"At the National Association for College Admission Counseling’s annual conference last month, several counselors discussed what they described as an increasingly common scenario: students using a fast-track application to apply to a college that’s a member of the Common Application. In such cases, high schools cannot electronically submit students’ supporting documents—transcripts, secondary-school reports, and letters of recommendation—to colleges.

"Why not? Because a member college isn’t able to download those documents until (or unless) a student submits his or her application through the Common Application’s Web site. In other words, a student can bypass the Common Application’s system by submitting a fast-track app, but that student’s counselor cannot do the same.
...
"Mr. Graf and other counselors have criticized Royall & Company, a direct-marketing firm that has pioneered the use of fast-track applications. Some of Royall’s clients package them as “V.I.P.” applications. The irony: Some colleges send such apps to thousands—even tens of thousands—of prospective students each year...

"The company’s leaders, who did not immediately return a telephone message on Wednesday, have previously described fast-track applications as a time-saving means of simplifying the application process, helping colleges reach more prospective students. They’re also good for business: Most colleges that use them report significant increases in applications.

"In recent years, Robert Killion, the Common Application’s executive director, has heard numerous complaints about the challenges raised by fast-track applicants applying to Common App colleges. Some counselors have asked why the nonprofit association does not transmit supporting documents for students who choose that option.

"Money is one answer, Mr. Killion concedes. For each application filed through the Common Application, the association gets a $4 fee from member colleges who use the Common App exclusively (institutions that also accept other applications pay $4.75 per applicant). “We’ve built a system for students who want to follow the Common App model,” says Mr. Killion. “If a student wants to pursue an alternative path, that’s their prerogative, but I’m not sure why we, for free, should have to subsidize someone else’s system.”
...
"Willamette is a member of the Common Application, and it offers a fast-track application. “Colleges that use both are put in a squeeze,” says Ms. Rhyneer, a former chairwoman of the Common Application’s steering committee.

"Although Ms. Rhyneer seconds the concerns expressed by Mr. Graf and other counselors, she disagrees with negative characterizations of fast-track apps. Willamette sends such an app to about half of its inquiry pool and uses it to encourage particularly promising applicants to apply. “Counselors tend to paint everybody using it with the same brush, but we’re not trying to get a zillion apps,” she says."

Monday, November 1, 2010

NoteUtopia seeks to become a marketplace for class notes taken by students; it offers to buy your class notes, or sell you someone else's. Not everyone thinks this is a great idea: they have been told to cease and desist.

"NoteUtopia, a startup company for college students founded by a young Sacramento State graduate, has been ordered to "cease and desist" by the CSU chancellor's office, which said the company is violating state education codes that prohibit students from selling their class notes.
...
"The 10-year-old law that prompted the ban is so obscure that it caught NoteUtopia's founder, campus officials and Internet law experts by surprise.

"Eric Goldman,director of the High-Tech Law Institute at Santa Clara University Law School and a professor of Internet law, said "many people had no idea it's on the books."

"But while the law may be a sleeper, the issue of what students can do with material taken from class lectures "comes up with some regularity," Goldman noted. It's at the heart of an academic and legal debate on intellectual property rights involving how classroom content is shared among students."

The editorial page editors at the Harvard Crimson approve of the ban on selling notes:

"Recently, California State Universityprohibitedstudents from buying and selling lecture notes online in light of NoteUtopia, a new website created for this purpose. Their decision is the correct one. The practice of trading class notes does not reflect the purpose of education and should be discouraged. Although proponents of this activity claim that the ban violates free speech, they should acknowledge it is entirely within an institution’s remit to control the distribution of lecture material as it sees fit."